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Wednesday, 8 February 2017
Page: 398

Senator HUME (Victoria) (19:19): I rise today to address a deeply troubling challenge facing my home state of Victoria—that of energy affordability and security. All of us in this place know of the recent closure of the Hazelwood power station in the Latrobe Valley and the loss of 800 jobs from the local economy and the devastation that inflicted on the Latrobe Valley community. Last year, in 2016, the Andrews Labor government increased the minerals royalty charge by 300 per cent—which is an extraordinary number—completely disregarding the concerns that this would reduce the viability of energy companies in Victoria and that it would cause significant increases in the cost of power in our state.

Unfortunately, the results have been very clear: Hazelwood workers are out of a job and Victorians are facing increases of up to $300 a year on their energy bills. Hazelwood supplied up to a quarter of Victoria's energy, but its closure makes our state reliant on others, instead of being energy self-sufficient. For a state with the energy resources of Victoria that is entirely unacceptable. This reliance puts our state in a very dangerous position. If observing Australia's energy market over the last year has taught us anything at all, it is that depending on other states for power can leave the lights off and bring business to a grinding halt.

Recent experience in South Australia shows us that states must be able to stand on their own two feet and supply local power for their people and their businesses. I ask: how can a state prosper when it fails to provide reliable power at an affordable price to its citizens? The answer is that it simply cannot. It is impossible. South Australia has unfortunately demonstrated the consequences of high energy costs and of creating an environment that is entirely hostile to investment, to business growth and, ultimately, to employment and to employment opportunities. South Australia has the highest unemployment rate in the nation, with Arrium's Whyalla Steelworks the most notable example of those job losses. The Wetherill Labor government's decision to provide unjustifiably high subsidies to wind and solar power suppliers has triggered blackouts and a spike in energy costs that has brought almost the entire state to its knees. It is something we have spoken about in this chamber and that has been spoken about repeatedly in the media.

While South Australia's energy security and economic woes are a sad corollary of South Australia's ideological approach to energy production, my primary concern is for the state I was elected to represent. Indeed, I hold grave fears for Victoria's energy security under an Andrews Labor government, a government that has put Victoria on the same path as South Australia. And if the Andrews government's 40 per cent renewable energy target is a threat to affordable and secure energy in Victoria, then my greatest concern is that Mr. Shorten's Labor opposition and their 50 per cent renewable energy target represents an even worse threat across our nation. Mr Shorten wants Australia to source 50 per cent of its energy from renewables by 2030, the exact same goal as Premier Jay Wetherill and his ill-fated state of South Australia. One would think that the malaise lingering around the South Australian economy is evidence that extreme renewable energy targets cannot sit alongside the goals of job creation and improving living standards, which Australians expect and deserve. Certainly, Victorians expect and deserve better.

At their heart, extreme renewable energy targets represent an ideological approach to energy that places emissions reduction ahead of energy security, and energy security is our priority. As it currently stands, renewable energy sources are unable to provide a consistent, secure baseload power supply to the national grid. Instead, renewables like wind and solar supply intermittent power, which unfortunately comes with major drawbacks. Put simply, when the wind ain't blowing and the sun ain't shining, power is simply not being generated.

The coalition government is acutely aware of these issues and has made a decisive move to improve Australia's long-neglected energy storage capacity. This, I believe, is particularly exciting. The Prime Minister has requested that ARENA and the Clean Energy Finance Corporation work together on a new funding round for large-scale energy storage solutions. This storage will improve the stability and the reliability of variable renewables.

But renewables alone will not fulfil our goal of stable and secure energy supplies. As old high-emissions power stations are retired, we will need to consider more baseload power to fill that void and be capable of supplying power day in and day out. As the world's largest coal exporter we have a vested interest in showing that we can provide both lower emissions and reliable baseload power with state-of-the-art clean coal-fired technology, utilising both combustion efficiency and pollution control. It is possible.

Indeed, our approach to emissions reduction should be technology agnostic—the maximum emissions reduction for the least amount of economic damage to families and to businesses. We should employ our vast supplies of coal in cutting-edge facilities that will allow us to use our natural competitive advantage in power production to deliver low-cost energy to Australian homes and businesses. Let me make it clear that our commitment to the federal renewable energy target remains unwavering, but this government is determined to achieve its target without the devastating impact that a 50 per cent renewable energy target under Labor, sadly demonstrated in South Australia, would have upon Australian businesses.

The Turnbull coalition government is approaching emissions reduction and energy security in a clear-eyed and far more pragmatic way. We are not at all shackled to certain technological methods, unlike those opposite, but rather we are determined to make sure that we choose the most practical, efficient path towards emissions reduction. This government is determined that Australia should be able to achieve the policy trifecta of energy that is affordable, reliable and secure. Labor's approach is driven simply by ideology, heedless of the cost of the thousands of Australian jobs that it will destroy. I am determined that my state will not follow in the same path as South Australia.